>> announcer: this is "nightly business report" with bill griffeth a trade turn-aroune there ar conflicting reports tonight that the u.s. i thinking about easing tariffs on chinese imports, and stomes wasted no eacting. binge watch. netflix revenue was not as hoped as wall street had and that took some air out of the stock that has been on a tear recen rising could extreme weather trigger a foreclosure crisis?gh tonit, a close look at the potentia those stories and much more tonight on "nightly for this thursday, january the 17th. and we do bid you a ood evenineverybody. sue is off tonight. the stock market lately has a become lik coiled spring, especially when it comes to

trade issues. witness what happened today. there was no official government release about the ongoing negotiations between the u.s. and china, but there was a "the walidday from street journal" saying u.s. officials were debating whether toe tariffs on chinese imports, and that spike in stocks was mediate, as you can see. trade sensitive names like boeing and caterpillar led the way higher. but some of those gains were soonpared back when cnbc reported that neither the treasury secretary nor the u.s. trade representative had made any recommendations with respect os tariffs by the close. at the the dow was up 162 points. as itha happens,was near the high of the day. the nasdaq was up 49 and t s&p 500 added 19. now, when investors saw thatdd midday rally in stocks, many of them did not want to miss out, and that's t way the thinking has been taking hold lately on wall street. bob pisani explains

>> the marke have a new fear, fomo or fear of missing out on the rally. the old fears haven't gone away, tariffs and china slowdowns, fed aggressiveness. as we got into the heart of earnings season, the markets have again resumed their upward drift. why is this happening? first and foremost, the fear that earldngs growth w go to zero in 2019 is largely abated.e earningsectations are lower, but most still are expecting gains in the mid-single digits rather than zero or negative earnings growth. for the first arter, for example, earnings growth expectations have gone from 8% growth on october 1ost just 3% today but the rate of secline hawed down. second, the market is considerably cheaper than a few months ago. even with a y,10% ra the s&p is trading roughly 15 times 2019 earnings. that's the low end of the historic range and well below the roughly 17 to 18 level it was during the height of last year. another factor is declining

volatility. this has made momentum following trends more comfortable with getting back in. finally, there's fomo, as i mentioned, this fear of missing out. with the s&p unexpectedly up 5% in the first half of the month, fund managers are again underperforming. those fund managers underperformed last year in a down market. o now theosite has happened and they can't afford to underperform in an up market as well. for "nightly business report," i'm at the new yor stock exchange. while some investors are fearful of missing out on any stock market rally, there are those who are keeping a close eye oninnother keycial market, namely u.s. corporate bonds. companies today carry a $9 trillion debt load, and that is twice as much as they did ten years ag at the height of the financial crisis. what does that signal a tut economy? joining us tonight is kathleen gaffney, director o diversified income with eaton vance. good to see foyou, thank joining us tonight.

>> thank you. great to see you, bill. >> i guess it would make senpa for ces to issue more debt over time when we were enjoying record low interest rates, right? >> a >> were you surprised at how much debt they took on, though? >> well, it is, i would think, a normal response to interest rates moving lower. and as long as the companies can still payon the back, that's not a problem. >> we have a chart we can show that was p together by a money manager that is based on information from the federal reserve and the commerce department and "the wall street journal" and it shows the rise and fall of corporate debt as a ratio of corporate debt to the size of the economy, going back to t 1980s. each time there was a peak in that ratio, the economy went into a recession. every single time. now we seem to be at a peak are you concerned about the

level of the debt, its relationship to the economy and the possibility of a recession? >> i am not overly concerned about the amount oft d because the interest rate that companies are paying i so low right now. the leverage to the economy is definitely something to keep an eye on,ut that' more relevant for assessing the country risk. is the u.s. government going to be able toay back their debt. with corporate bonds, you are lending money to corporations.d in the investment grade market, most of these companies are household names and very solid credits. they have been borrowing at lower interest ratesnd borrowing at the very long end of the yield rve. th means that they aren't going to have to pay off tt

debt tomorrow, so they have time to grow into that. so i notorried about a systemic problem in the market, but i d recognize it has definitely grown by leaps and bounds. >> are therers sec that you think are good -- are attractive right now in the corporate bond market, for p who may be looking for income right now? >> oh, gee, the positive side of interest rates moving higher is that income levels will move higher too and that's great for savers and people living on a fixed income. but we're coming off of what was essentially theboero d. what the fed is trying to do is just get the leveler of it rates at the short end, which is basically the price of money. what does it cost to borrow in the corporate bond market. and getting back to n amal level, which would reflect a

healthy level of inflation and a healthy growth rate. >> right. >> is where they're headed. we have a ways to go before we get there. there is still amo fairt of stimulus being provided. i won say that the fed is ting to tighten. >> right. >> it just means the cost of money is going up. >> kathlee gaffney, thanks for joining us tonight. appreciate it. ,> thanks. we a few days after netflix announced that largest price hike in its history, it reported a mr.ed quar earnings out after the bell tonight were better thanpe ed, but revenue was a little light. here are the numbers that we got late toda netflix earned 30 cents a share, 6 cents better than estimate revenue was up 27% from a year ago, but analysts were lookire for that sent the stock lower in initial after-hours trading tonigh julia boorstin has the one takeaway for investors. >> netflix giving more details of itsre massive h. on top of announcing record paid

membership growth, adding 8.8 million payingrs subscribe worldwide, the company giving sense for the very first time of how many peopl are watching its shows around the world. the company saying it e that over 80 million member households will watch "bird box" starring sandra bullock in its first four weeks on the platform. also t king about thecompany's global hits, saying spanish language original "elite" has been vie by over 20 million member households in its first four weeks. th company also projecting two new series, "you" and "sex education" will be watched by over 40 million households in their first month.t agaihe revelation of these massive numbers, ceo reed hastings talking abo competition, saying it's not just competing with similar subscription streaming services such as hbo but more so competingid with game hortnite as well as youtube. hastings saying wll this competition, netflix' focus remains on improving its content. for "nightly business report," i'm julia boorstin in los angeles. lso out after the bell tonight, dow component american

express reported rordrevenue, as more people used its credit cards and charged more. the ceo said that growth was broad based and that the company is seeing good returns on its inve ements, butnings were not as strong as hoped for. investors sent that initially lower in after-hours trading tonight. and then there's morgan stanley, which many say was the most disappointing bank earnings report this week. both profit and revenue came in belowta expons because its two biggest businesses, trading and wealth management, suffered declines amid what it calle a difficult market environment. but on the earnings coerence call today,ceo james gorman said the most recen quarter is not indicative of things to come. >> we do not believe the fou ih quarte a new normal. in fact, while it's early days, e first quarter has started on a similar path to the start of the first quarter of 2018. >> but shares of morgan stanley did fall 4% in today's session.

se ere, the state department today recalled most of its furloughed a workers said it is taking steps to pay salaries despite the partial government shutdown. ther agencies have also recalled some of their workers as well, but without pay. and they did so by expanding the definition of essential servntes. sa brewer has more on that from hackettstown, new jersey tonight. >> reporter: after 27 days of a partial government dosh, the doors of the farm service agency opened once again, but for three da the fsa provides crop insurance and serves as a lender of last row sort for farmers on the brink of going belly up. farmers like georgefetzer. >> i lost $40,000 retail. for sll guy like me, i can't afford that. and all i wantedas to do get a off. o pay my bills >> reporter: he expected to close on his loan in december, but the shutdown prevented himn from getti the final

paperwork. and so as agriculture secretary sonny perdue ordered 2500 amployees to open half the offices around the country for very limited services, farmer george fetzer showed up to see if he could push through his loan. but no such luck. >> i cannot get my money because they don't have the funding in place. >> reporter: nationwide other agencies are also bringing back furloughed employees. >> aviation safety is a priority and should remain a prioritprio >> reporter: 3600 safety inspectors for t faa have been recalled to their jobs. the fda is bringing back 400 inspecrs to check high-risk ed foods, micine and medical devices. alf the irs will bring back its workforce, or 46,000 employees to help issue tax refunds. none of these workers will get paid. air trafftr clers and other employees sued the trump administration over mandatory work without pay..s

a district judge this week declined to rule on the issue and decline to give employees the right to sit out if they choose. in the meantime, other agencies are beginning to run out of money. the federal court including the supreme court, can only sustain funded operations through january 25th. and cilian businesse are beginning to see an impact from the government shutdown too. some farmers who were getting payments to mitigate the financial damage fro and the trade war haven't received their>> checks. see how this has affected me, but all these people that this whole shutdown has affected, it's just lik people's lives are getting ruined over this. >> reporter: as moreederal employees are punching the clock again action even as the wn sh barrels on, a new bill signed by president trump now guarantees bac pay for the 800,000 employees who have been forced off their jobs. in hackettstown, new jersey, contessa brewer, "nightly

time to take a look at some of today's upgrades and downgrades. we begin with dow component walgreens. it was given a sell rating in new coverage at ubs. the analyst said the company's core retail margins will remain under pressure the next several years. th price target is $70. the shares there fell one penny to $71.99. chipotle was downgraded from hold to buy. the analyst says any positive news is factored into the stock given its 30% gain since late december. price target 10. shares today rose along with the broader market to$517.66. still ahead, airbus deepens its ties to the ep south.

shands of missile weapons makers rose today after president trump announced the resultsf a missile defense review and rolled out his plan to ramp up the systems' capabilities. this would be the first update to that program since the obama administration back in 2010. >> our review calls for 20 new ground-based interceptors at ft. greeley alaska and new radars d sensors to immediately detect foreign missile launched against our great nation. we are committed to establishing a missile defense program that can shield every cit in the united states. >> the review recommends studying space-basedpo wy and it did single out north korea as an ongoing that sent shares of northrop

grumman,ockheed a raytheon all higher in today's trade. the growing importance of the deep south t america's ai yags industry is getting a big boost. bueurope's a is expanding its manufacturing plant in mobile, alabama. phil lebeau has more on this newest commercial airplanes that will soon be flying out of the southeastern unitestates. >> with fireworks and applause, airbus executives and leaders broke ground on new assembly lines in mobile, alabama, where airbus's newest plane, the a-220 will eventually be built. adding 400 jobs and more than doubling the number of currently working at the plant. >> we didn't come here because you were just nice people. we made the decision bause we were convinced it was for the good of airbus going forward. >> airbus opened its first plant in alabama four years ago in hopes it would help the european company win more milary a

commercial plane orders in the u.s. and that's happening with its newplane. previously knowns athe bombardier c-series which will seat up to 150 passengers. this move also reinforces justo how impnt the southeastern u.s. has become for commercial aviati's. boeilant in charleston, south carolina, where they build the 78 dreamliner now employs more than 6,500 workers. while there's no expectation the plane building hubs outside seattle, washington, or france will ever be replaced, boeing and airbus have clearly spread out their footprints. and both footints, alo with manufacturing jobs, continue to grow in the deep south. the airbus plant in alabama is scheduled to roll out its first all-new a-220 by the middle of next year. phil lebeau, "nightly business report," chicago. signet jewelers loses the sheen and how.

that's how we lose tonighs market focus with the company cutting its profit and sales idance following slower-than-expected holiday sales. it also hinted it could close more stores as a way to improve profitability. shares plunged by 24% today to 5.13. industrial company ppg issued a weak outlook citing a softening global economy and declines for its products in some countries. the company ison alsodering splitting up its building and products coatings unit following pressure from an activist investor. the stock rose more than 4.5% to 107.36. construction supply company fastenal topped wall street revenue forecasts. it gaveodnlyt signs it's been able to push through higher pricing.e results w often seen as a gauge of the health of the broader manufacturing sector. w that sto up nearly 6% to

$57.34. regional bank bb & n taumd the wall street estimates thanks to higher revenues and a decline in costs. loans improved during the quarter and the company ceo says that should continue. >> our business activity was strong in the fourth. everything we see now wouldt sugg that it will be strong on a seasonally adjusted basis through the first, so there's no real reason today to be concerned about business activity. >> ghe stockned 1.5% to $48.28. back when the tax law was passed more tha a yearago, many thought that there would be a migration from high tax states to lower tax states because the legislation limoned deduc for state and local taxes, including property taxes, to $10,000. more than a year later, that appears to be exact what is happening, especially for the wealthy. robert frank takes a look now at e millionaire migration. >> a new report out today shows

the south flori real estate market shining bright, while the northeast is facing a long market chill. average sale prices up 7% in miami and up 20% in bocraton. ft. lauderdale, palm beach and wellington also posting solid numbers for the fourth quarter, according to a report from douglas elleman and miller samuel. florida brokers say it has been the strongest start to a winter selling season in years. but manhattan just finished its worst year since the financial crisis.gr nwich, connecticut, once home to all those hedge fund billionaires, it now fille with empty mansions. prices there falling 20% in the quarter, and there is now a two and a half year supply of luxure so why the tail of two markets? well, taxes are one big reason. the new tax law which limits the amount of stateoc and taxes you can deduct makes it more expensive now to live and own in new york and other high-tax

states. >> a person, a business owner making a million dollars a year will actually be saving enough money in taxes to support a $2 million mortgage on a condo in miami. >> tdemographics is another reason. the population is getting older and they are responding with elaborate and luxurious buildings in the sunshine state lure those migrating manage airs. desert development just finished a portia to your whi has a glass elevator to bring your car to your apartment and it's finishing where you can have your wardrobe and entire aparent designed by armani. more high-end development is likely as the builders follow the money. for "nightly business ," i'm . coming up, could extreme weathe trigger the next fo?

les moonves is not giving up without a fight. according to a regulatory filing, thebs former ceo is demanding binding arbitration following the company's board's decision that he was fired for cause and, therefore, not entitled to li$120 m in severance payments. moonves was ousted last fall following multiplns allegat of sexual misconduct. he has denied any wrongdoing. microsofted annou today it is investing $500 million to tackle seattle's housing crisis. the company says the money will go toward building new homes and preserving existing housing in an effort to increase afford ability for local residents. microsoft added its role is only part of the solution. >> we need market incentives, we

need zoning changes, we need to incentivize lower and middle income housing, we need capital. we're bringingapital to the table. different solutions may make sense for difnirent comes or for different companies. >> microsoft pointed out that tn seattl local median income has not kept pace with housing costs. finally tonight, a new government report warns climate cchange willt the u.s. economy hundreds of billions of dollars in annual losses by the end of the century. from floods to droughts, the threat of extreme weather to homes is certain clear, but the risk to the mortgage market is just now coming into focus. diana olick has the next installment of her series called "ring risks." h >>ricane harvey flooded close to 100,000 houst area homes, and the vast majority of them had no flood insurance. >> ultimately ended up about four feet. >> jennifer and andy taylor did have insurance,imnd at the

vowed to rebuild. >> the fabric of the community has been amazg. >> but as they watched several homes on their street go into foreosure and the fabric of their community seem to unravel, theoi taylorsd other struggling neighbors and sold to hungry investors who descended on thecity. houston's strong economy made it a hot housing market before the storm, and investors are still swarming foreclosure auctions like this one now, rekindling images from the foreclosure crisis a decade ago. >> i've heard plenty of stories of homeowners who but to walk away. >> in harvey's federally declared disaster areas, 80% of the homes had no flood insurance because they weren'tll norma prone to flooding. serious mortgage delinencies on damaged homes jumped more than 200%, according to core logic. houston could have seen a ee crisis were it not for that strong investor demand. the next city to get hit bytu ral disaster might not be so

lucky. in rhouston, inves purchases roperties jumped more than 50% in the year following harvey, according to adam data solutions. some were large buyers bike homw vesters, othe smaller home flippers like j.p. patel. >> as an investor, was a perfect >> patel and his team have bought more than 80 flooded properties so far. >> we literally can avoid the whole problematic nature of the foreclosure process. >> and it's not over t. even a year after harvey, neighborhoods like this one are still rebuilding, littered with empty houses and empty lots. some say allhi of ts should be a wake-up call to one na banks and mortgage lenders. we asked ed delgado, the ceo of a mortgage trade association if the mortgagarket is prepared for increasingly severe weather. >> i don't think they are. i think if we look at the basic foundation of what drives the mortgage market is the application of credit risk. what's missing is the inspect

understanding of weather risk c where those take place. >> delgado emphasized that most of the damaged homes in houston were not in fema flood planes. >> you have this tremendous urbanization, population growth, roads that are being built in the last ten years. where does the water go? is there an underlying risk for us to examine with respect to our portfolio and then make decisions, should we be lending those markets? >> lenders tod t and federal government which backs most loans based their risk on dfemas fl maps. even top fema officials admit their maps don't account for increasingly extreme weather. david marstead leads risk management at fema. >>ne we can't deter what's going happen in 12 months beyond because insurance is set up for what your risk today, and it wouldn't meet actuarial science uture rge you for a potential. >> fema is required to update its maps every five years and marstead says it relies heavily

on local comnities reporti problems. but some don't because they don't want their insurance premium to go wup. know that only one-third of the properties in the high-risk area have flood insurance, so we have a lot of work to do. >> as does the mortgagest in, which could ultimately see a climate foreclosure isis. >> i think if it comes close in terms of eosing lenders to uncontrollable risk, when you have a trillion dollars of real estate at risk in coast aal markets, it's time you start paying attention to that. >> for "nightly business report," i'm diana olick in houston. gh thanks for watching to

milan's monumental cemetery. while there are many evocative cemeteries in europe, this one -- with its emotional portrayals of the departed and their heavenly escorts -- in the melodramatic art styles from the late 19th and early 20th centuries -- is in a class by itself. it's a vast garden art gallery of proud busts and grim reapers, heartbroken angels and weeping widows... soldiers too young to die. s of grief, hope, and memories.

>> this is "bbc world news america." funding of this presentation is made possible by the freeman foundation, and kovler foundation, pursuingo tions for america's neglected needs. >> wow, that is unbelievable. ! >> i'm flying ♪ >> stay curious.